Indhushree A Uma Gowri M Saravana Kumar M Jeyajothi R Ramadass S Rajesh Kumar A


India is one of the world’s largest producers and exporters of cotton, the major raw material for the textile industry, employing more than 4.5 crore people in the country. The present study aimed to analyse the impact of adverse trade in Indian cotton sector on labor and household income by employing Social Analysis Matrix based multiplier model and partial equilibrium model. Indian textile sector has strong backward linkages with primary input multiplier and household income multiplier of 4.13 and 3.44, respectively and, thus transmitting external impacts to the labour and household income. The sector has a higher multiplier effect of 10.17 on production activities, of which the impact on the cotton sector is 0.126. Fall in export and domestic demand for clothing and apparel in addition to movement restrictions around the world during the period 2020-2021, disrupted cotton supply chain and consequent fall in demand and price of the commodity. Simulations for the increase in carry-over stock and reduction in domestic consumption and cotton exports revealed that limiting the commodity's production and supply would retain the market equilibrium and increase the domestic price to the advantage of the farmers. The study reveals that dynamics in the Indian cotton sector trade significantly impacted labour and household income. Appropriate planning for areas under cotton cultivation and alternate procurement mechanisms during emergency situations would stabilise the Indian cotton economy. 





Cotton, Household income, Partial Equilibrium, Social Accounting Matrix

AEPC (2020). Impact of COVID on Indian Apparel Exports. Apparel Export Promotion Council(AEPC).https://aepcindia.com/system/files/AEPC%20Covid%20Study%208%20May%202020.pdf
Bellu, L.G. (2012). Social Accounting Matrix (SAM) for analysing agricultural and rural development policies. Conceptual Aspects and Examples. FAO, UN. EasyPol Module, 130. http://www.fao.org/3/a-bq865e.pdf
CACP (2020). Price policy for Kharif crops – The marketing season 20-21. Commission for Agricultural Costs and Prices (CACP), Department of Agriculture, Cooperation & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India, New Delhi. http://cacp.dacnet.nic.in/ViewQuestionare.aspx?Input=2&DocId=1&PageId=39&KeyId=702
CMAI (2020). Impact of COVID-19 on Textiles Industry: Tirupur experience – GIM BUZZ. Clothing Manufacturers Association of India (CMAI), Mumbai, Maharashtra, India. https://voicesofgim.wordpress.com/2021/03/17/impact-of-covid-19-on-textiles-industry-tirupur-experience/#:~:te xt=The%20Clothing%20Manufacturers%20Association%20of%20India%20%28CMAI%29%20predicted,indust ry’s%20unemployment%20level%20rising%20to%2010-15%20per%20cent.
Indexmundi (2020a). India cotton production. https://www.indexmundi.com/agriculture/?country=in&com modity=cotton&graph=production
Indexmundi (2020b). India cotton exports. https://www.ind exmundi.com/agriculture/?country=in&commodity=co tton&graph=exports
Khondker, B.H. (2018). Backward and Forward Linkages in the Bangladesh Economy: Application of the Social Accounting Matrix Framework In: Structural Change and Dynamics of Labor Markets in Bangladesh (pp. 171-187). Springer, Singapore.
Ministry of Textiles. (2020). Annual report 2019-20. Ministry of Textiles, Government of India, New Delhi. http://texmin.nic.in/sites/default/files/AR_MoT_2019-20_English.pdf
Mohanty, S., Fang, C. & Chaudhary, J. (2002). Assessing the competitiveness of Indian cotton production: a policy analysis matrix approach. CARD Working Papers. 328.
Pradhan, B.K., Saluja, M.R. & Sharma, A.K. (2013). A social accounting matrix for India 2007-08. Institute of Economic Growth, University of Delhi.
Textile value chain. (2020). Impact of COVID-19 on exports of textile and apparel industry in India. https://textilevaluechain.in/2020/06/09/impact-of-covid-19-on-exports-of-textile-and-apparel-industry-in-indian/
USDA (2020). Cotton: World markets and trade. Foreign Agricultural Service, United States Department of Agriculture (USDA). https://apps.fas.usda.gov/psdonline/circ ulars/cotton.pdf
WTO (2019). World trade statistical review 2019. World Trade Organisation (WTO), Geneve, Switzerland. https://www.wto.org/english/res_e/statis_e/wts2019_e/wts19_toc_e.htm
WTO. (2021). Impacts of the COVID-19 pandemic on cotton and its value chains. World Trade Organis
ation (WTO), Geneve, Switzerland. https://www.wto.org/english/tratop_e/agric_e/covidinp actstud yc4ldcs cotto n_e.pdf
Research Articles

How to Cite

Spill-over effect of India cotton trade on labour and household income. (2024). Journal of Applied and Natural Science, 16(1), 86-93. https://doi.org/10.31018/jans.v16i1.5256